The author is a Forbes contributor. The opinions expressed are those of the writer.

Loading ...

Loading ...

This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe

Recently I interviewed Randall Kempner, Executive Director of the Aspen Network of Development Entrepreneurs. In this role, Randall oversees the implementation of ANDE’s extensive program and policy agenda, including efforts to develop standardized social and environmental metrics for impact investment, training seminars on supporting and investing in emerging-market entrepreneurs, and the ANDE Capacity Development Fund—a $1m facility which supports capacity building and innovation within the small and growing business sector.

Randall has nearly twenty years of experience in the field of national and international economic development. Prior to joining ANDE, he served as Vice President for Regional Innovation at the U.S. Council on Competitiveness. Randall graduated from the University of Texas with an M.B.A and an M.P.A. He earned his bachelor's degree in Government from Harvard University.

Rahim Kanani: Describe a little bit about the motivation and founding behind the Aspen Network of Development Entrepreneurs.

Randall Kempner: ANDE was established by a group of leading organizations who believe that helping entrepreneurs in emerging markets is a critical tool in fighting global poverty. We seek to create a movement like microfinance – but aimed at the next level up – at small and growing businesses that can employ 20 or 200 workers. We’re about building prosperity with business tools that provide more hope and opportunity for sustainable solutions than traditional development approaches.

The group grew organically. Many of the initial founders would run into each other at development conferences where entrepreneurship was only a tangential topic. These leaders ultimately recognized that to expand the sector they would need to create an intermediary organization to support knowledge sharing, professional training, standards setting, and industry advocacy.

Rahim Kanani: How does this network fit within the larger context and work of the Aspen Institute?

Randall Kempner: One of the Aspen Institute’s core roles is helping to convene organizations and individuals who should be talking, but aren’t necessarily doing so. Peter Reiling, an SVP at Aspen and former CEO of TechnoServe, played an important role in organizing some of the initial ANDE planning meetings at the Institute. The founders of ANDE also believed that the Institute would be a good organizational home for the initiative, and so it was officially launched as policy program at Aspen in 2009.

Rahim Kanani: As you survey ANDE's 130 plus members who have operations in 150 emerging markets, what are some trends the sector should take note of?

Randall Kempner: Well, the first thing to note is that the small and growing business (SGB) sector is hot. Across the world, the power of small business entrepreneurship to build prosperity for the poor is being increasingly recognized. Over the past year, we have seen significant strides made by development financial institutions in impact investing. For instance, the G20 launched an SME Finance Challenge aimed at providing both investment and grant support to innovative organizations that support small firms. The Overseas Private Investment Corporation (OPIC) has launched a new Impact Investment Initiative, while in Europe the UK Department for International Development (DFID) and Germany’s DEG are also actively developing programs in this space. In the last year alone, at least 30 new investment funds tailored to providing investments between $20,000 and $2m to entrepreneurial firms have launched.

The broader impact investment sector is beginning to mature. We’ve got a commonly accepted set of standards for measuring the social, environmental and financial results of impact investments (the Impact Reporting Investment Standards (IRIS) initiative); a continual stream of reports that aim to measure the present and future size of the industry, and a significant amount of activity focused on building marketplaces and exchanges to support investments in SGBs.

Rahim Kanani: What are some of the key challenges facing development entrepreneurs today?

Randall Kempner: Despite the progress of the sector and the highly optimistic forecasts for its growth, SGBs in emerging markets still face significant barriers. Just about every emerging market entrepreneur faces challenges in finding the talent to build a strong management team, in accessing markets, and in obtaining growth capital.

ANDE members exist to help firms overcome these obstacles. Through training, mentorship, capacity development and direct investment, ANDE organizations provide services to help entrepreneurial teams grow their businesses and address social and/or environmental challenges.

For the capacity development organizations, universities and investment funds that make up ANDE, finding the resources to support entrepreneurs continues to be a challenge.

Rahim Kanani: And at the same time, what are some of the key opportunities at their doorstep?

Randall Kempner: For emerging market SGBs, we see a growing opportunity to participate in global supply chains. As large corporations expand in developing countries, small businesses will have new prospects as raw material providers, processors and distributors. In agriculture, in particular, the opportunities will grow as the world looks for ways to effectively feed an expanding population.

In addition, the increased focus on Base of the Pyramid markets by large corporations and development agencies offers a particular opportunity for local firms to both employ and serve people who live in poverty.

Rahim Kanani: If the work of ANDE rests upon one core philosophy about the way in which the world works, what is that philosophy?

Randall Kempner: We believe that market-based solutions are an effective mechanism for sustainable prosperity creation. Supporting for-profit small business entrepreneurs will not solve every problem nor will it work in every environment, but right now it is a highly underutilized strategy. We should do whatever we can to unleash the power of local entrepreneurs.